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Inglewood Radiology Medical Group, Inc. v. Hospital Shared Services, Inc.
Citations: 217 Cal. App. 3d 1366; 266 Cal. Rptr. 501; 1989 Cal. App. LEXIS 1359Docket: B035518
Court: California Court of Appeal; July 31, 1989; California; State Appellate Court
An appellate court affirmed that an insurance policy for medical malpractice did not require the insurer, American Continental Insurance Company, to defend Inglewood Radiology Medical Group, Inc. in a wrongful termination lawsuit filed by Dr. Gail Portanova. Following her termination in March 1981, Portanova alleged wrongful termination, false accusations, and sought damages, leading Inglewood Radiology to settle the case for $150,000 and incur $90,465.17 in legal fees. The insurance policy covered indemnification for damages arising from "professional services," which were defined as services performed in the medical profession. The insurer refused to defend the lawsuit, arguing that wrongful termination claims did not arise from the rendering of professional services. Inglewood Radiology sued for breach of contract, but the trial court granted summary judgment for the insurer, concluding that the claim did not fall under the policy's coverage. The appellate court upheld this decision, emphasizing that clear policy terms should not be subject to forced interpretation to impose liability. In interpreting a professional liability insurance policy, terms are understood based on their ordinary meaning within the profession. The policy in question required the insurer to indemnify the insured for injuries related to "professional services" performed by a physician. The appellant argued that the decision to terminate an employee (a physician) constituted the rendering of professional services since it required a physician's expertise. However, the court determined that this decision was a business or administrative action, not a professional service. Consequently, the insurer was not obligated to defend the wrongful termination lawsuit filed by Portanova. The appellant's claim that slanderous comments made during the termination process were covered under malpractice insurance was also rejected. Unlike in Geddes v. Tri-State Ins. Co., where slander occurred during a medical consultation, the comments in this case were made in an administrative context. Therefore, the actions did not fall within the scope of professional services, and the insurer had no duty to defend the lawsuit, affirming that there was no reasonable expectation of coverage. The judgment was upheld, with concurrence from the justices. The trial court interpreted 'rendering services' in the contract as meaning 'rendering services to others.' While some malpractice policies include similar language, there are instances where a medical professional may provide services without direct patient interaction, such as consulting with another physician. Upon independent evaluation, it was determined that the malpractice contract did not cover Portanova's wrongful termination lawsuit, negating the need to address the distinction suggested by the trial court. Additionally, the case of St. Paul Fire, Mar. Ins. v. U.S. Fire Ins. Co. is deemed irrelevant, as it involved an insurance policy that covered 'professional services' related to activities on a hospital board, which included protection for defamatory statements made during board meetings.